A C T A U N I V E R S I T A T I S L O D Z I E N S I S
FOLIA OECONOMICA 4(324) 2016
[181]
http://dx.doi.org/10.18778/0208-6018.324.12
Małgorzata Mazurek-Chwiejczak
*TRENDS IN PERSONAL INCOME TAX PROGRESSION
IN OECD COUNTRIES IN THE CONTEXT OF INCOME
REDISTRIBUTION
1Abstract. In recent years there has been an evident, widespread increase in income
disparities in OECD countries. Progressive Personal Income Tax, which enables adjustment of the tax burden to individual’s capacity to pay, is one of the fundamental instruments used in redistribution policy. The aim of the paper is comparative analysis of the level of Personal Income Tax (PIT) progression in OECD countries and identification of trends in progression in the context of income redistribution. The article discusses the progressivity level of PIT in OECD countries measured by the differences in the burden at different levels of income. The cross-country and historical trends in the statutory PIT rates, the number of tax brackets and the provisions which exempt an initial level of income from tax burden are analysed and graphically illustrated.
Keywords: Personal Income Tax, progression, redistribution, tax policy.
1. INTRODUCTION
Nowadays the gap between the richest and the poorest is at its highest level
in most OECD countries. In 2014 the top 10% of population earned 9.5 times
more than the bottom income decile. 30 years ago the ratio stood at 7:1 (OECD
2014a: 1). Over the last two or three decades the increase in top income shares
has been observed in all but a few OECD countries (Matthews 2011: 18).
Meanwhile the number of people at risk of poverty grew from 28% in 1990 to
34% in 2012. In Ireland, Spain and Portugal the ratio exceeds 40%. The Gini
coefficient on disposable income (after taxes and transfers) has increased since
the mid-1980s by 3 percentage points to 0.32 (2011/2012).
The phenomenon has raised concerns about the impact of income and social
inequalities on economies and societies. According to J.K. Galbraith (1996: 62–63)
„the modern market economy accords wealth and distributes income in a highly
* Maria Curie-Skłodowska University (UMCS) in Lublin, malgorzata.mazurek-chwiej-czak@poczta.umcs.lublin.pl
1
The project was funded by the National Science Centre based on the basis of the decision number DEC-2012/05/N/HS4/00481.
unequal, socially adverse and functionally damaging fashion. (…) This, the
good society cannot accept. (…) There is a strong chance that the more unequal
the distribution of income, the more dysfunctional it becomes”. The experiences
of many countries prove that an excessive spread between the extremities of
wealth and poverty gives rise to social conflicts and results in political upheavals
(Moździerz 2012: 532). Moreover, there is strong evidence that the high level of
income inequality affects economic growth. The latest OECD analysis suggests
that the rise in Gini by 3 points would reduce GDP by 0.35 percentage points per
year over 25 years. The cumulative negative impact seems to be significant – 8.5
per cent GDP loss at the end of the period (OECD 2014a: 2).
That is why it is so important to have a properly defined policy for the
narrowing of inequalities with a major part to be played by social transfers, as
well as the tax system and its individual elements. The influence of fiscal policy
on the level of income dispersion in OECD counties is significant. The
comparison of the average value of Gini coefficient for the gross market income
(i.e. before taxes and transfers) with its level for disposable income shows that
the second indicator is definitely lower. The difference between these two
coefficients in most OECD countries exceeds 0.15 (OECD 2014b). This proves
the existence of widely defined fiscal policy and its influence on the level of
income disparities.
Fiscal instruments of reduction of income inequalities include both income
based instruments – taxes and social security contributions, as well as
expenditure instruments such as social transfers. It is estimated that in OECD
countries 75% of the reduction is due to transfers and the rest to direct household
taxation (OECD 2012: 3). This fact confirms that the material role in
redistribution policy is played by expenditure instruments, although the tax
system can supplement the effect.
The aim of the paper is to provide a comparative analysis of the level of
Personal Income Tax (PIT) progression in OECD countries and identification of
trends in progression in the context of income redistribution.
2. THE ROLE OF PROGRESSIVE PERSONAL INCOME TAXES
IN THE REDUCTION OF INCOME INEQUALITIES
The impact of individual tax instruments on income dispersion is very
diverse. The consumption taxes (especially Value Added Tax and excises on
energy) tend to be regressive. They have been described as anti-democratic and
anti-family since the XIX century (Gaudemet, Molinier 2000: 496). The
regression of VAT and excises is closely linked with the fact that poorer
households are characterised by lower propensity to consume, which means that
they consume a relatively larger share of their income than the better-off. The
immovable property tax with the area basis has the same character. (Etel,
Dowgier 2013: 14; Głuszak, Marona 2015: 91).
There is a wide consensus that the key tax instrument in redistribution policy
is the progressive Personal Income Tax. Its direct and elastic construction enables
to adjust the tax burden to individual traits of a given taxpayer and his household.
Progression in personal income taxation was already known in Acient Athens
under the reign of Solon (Małecka-Ziemnińska 2012: 143). The theoretical
justification of the progressive schedule is the theory of equal sacrifice,
formulated by J.S. Mill (1966: 564). Due to progressive PIT schedule, burden of
the construction can be linked to individual’s capacity to pay (ability-to-pay
principle) (Gwiazdowski 2001: 74). A tax is progressive if the average tax rate
increases with income or, equivalently, if the marginal tax rate is higher than the
average tax rate at a particular level of income (Paturot, Mellbye, Brys 2013: 4).
The main premise of the use of such kind of scale is an urgent need for social
justice. The progressive scale pursues the principle of equity, which occupies
a special place in the discussion of the optimal taxation. The postulate of
equitable taxation was formulated by, among others, A. Smith (2007: 572),
A. Wagner (Gomułowicz 2001b: 47) and J. Stiglitz (2004: 550–575).
The individual’s ability to pay is defined as financial endurance of a taxpayer.
It means that it should be possible to a taxpayer to bear the level of tax burden
and the tax burden should not cause a taxpayer’s resistance (Gomułowicz 2001a:
55). The progression in personal income taxation means that the tax absorbs
a larger share of the income of the well-off. As a result, the income disparity
after taxation is lower than before taxes.
3. TRENDS IN PERSONAL INCOME TAX SCHEDULES
The progressivity of the PIT depends on the level of statutory rates and their
relations – in particular the difference between the top and the bottom rate.
Another important factor determining the level of progression is the number and
width of the tax brackets (Paturot, Mellbye, Brys 2013: 4).
The potential benefits of flat PIT has been widely discussed in the literature
(Hall, Rabuska 1998: 79–109; Owens 2013: 679; Homes 2008: 86), the vast
majority of OECD countries use the multi-rate formula of the tax. The average
number of tax brackets decreased significantly during the 1980s. In 1980 it was
common for OECD countries to have 14 tax brackets. The number dropped to 6
by 1990. In 1990 11 OECD countries had 6 or more brackets, 4 countries had 10
or more brackets and only Iceland used single-rate formula of PIT. By 2010 the
reduction trend was continued, but at a slower pace. As a result, the average
number of tax brackets in OECD countries was reduced to 4. Three Central-East
countries (Czech Republic, Estonia and Slovak Republic) adopted flat PIT
systems during the period. The trend has been reversed in the 2010s. In 2012 the
Slovak Republic resigned from the single-rate formula. Moreover, Finland,
Israel, Luxembourg, Spain, Slovenia, Japan, Korea, Mexico and the United
States added additional tax bracket(s) to the PIT schedule.
Table 1. Number of Central Personal Income Tax Brackets Country / Year 1990 2000 2010 2014 1 2 3 4 5 Australia 7 4 4 4 Austria 5 4 3 3 Belgium 7 7 5 5 Canada 3 3 4 4 Chile n.a. 6 7 7
Czech Republic n.a. 4 1 1
Denmark 3 3 2 2 Estonia n.a. 1 1 1 Finland 5 6 4 5 France 12 6 4 4 Germany 3 3 4 4 Greece 9 5 7 3 Hungary 4 3 2 1 Iceland 1 2 3 3 Ireland 3 2 2 2 Israel 5 5 6 7 Italy 7 5 5 5 Japan 4 4 6 6 Korea 4 4 4 5 Luxembourg 24 16 16 17 Mexico 6 10 8 11 Netherlands 3 4 4 2 New Zealand 3 4 4 3 Norway 3 3 3 3 Poland n.a. 3 2 2 Portugal 5 5 7 5
Table 1 (cont.) 1 2 3 4 5 Slovenia 6 3 3 4 Spain 16 6 4 7 Sweden 4 2 2 2 Switzerland 10 10 10 10 Turkey 6 4 4 4 United Kingdom 2 3 3 3 United States 2 5 6 7 OECD average 6 5 4 5 Source: OECD (2014c).
The changes in the number of tax brackets were closely linked to the
changes in the level of statutory tax rates. Despite the fact that the statutory rates
are only one factor determining tax burden, their modifications are a powerful
policy tool for changing tax burden. In the context of progressivity special role is
played by marginal PIT rates. The trend towards lower rates was clear from
2000 to 2009. The level of the rates in the top bracket decreased during the
period in 26 out of 33 OECD countries. The strongest reductions took place in
France, Germany, Denmark, Norway – the countries where the initial level of
the top PIT rate was one of the highest in the Organisation. The trend was
accompanied by the reduction in the threshold where the top rates apply
(Table 2). In contrast, at the same time, OECD countries diverged in their
policies regarding changes in their bottom statutory rates.
Table 2. The level of the top statutory Personal Income Tax rates in OECD countries
Country / Year 2000 2004 2008 2010 2012 2014 t.t.r. thr. t.t.r. thr. t.t.r. thr. t.t.r. thr. t.t.r. thr. t.t.r. thr. 1 2 3 4 5 6 7 8 9 10 11 12 13 Australia 48.50 1.21 48.50 1.24 46.50 2.49 46.50 2.70 47.50 2.45 46.50 2.26 Austria 50.00 2.33 50.00 2.07 50.00 1.87 50.00 2.10 50.00 1.99 50.00 1.92 Belgium 60.50 2.33 53.50 1.05 53.70 1.01 53.70 0.99 53.70 0.99 53.70 1.02 Canada 47.86 2.10 46.41 2.97 46.41 2.87 46.41 2.86 47.97 10.65 49.53 4.45 Chile 45.00 16.33 40.00 19.04 40.00 18.26 40.00 14.03 40.00 13.40 40.00 12.76 Czech Republic 32.00 2.46 32.00 2.02 15.00 0.45 15.00 0.43 15.00 0.41 15.00 0.40 Denmark 59.70 1.05 59.73 1.05 59.73 1.02 52.24 1.13 60.23 1.08 60.42 1.23 Estonia 26.00 0.16 26.00 0.19 21.00 0.17 21.00 0.18 21.00 0.16 21.00 0.14
Table 2 (cont.) 1 2 3 4 5 6 7 8 9 10 11 12 13 Finland 55.17 2.15 52.12 1.93 50.05 1.77 48.98 1.81 49.00 1.83 51.49 2.52 France 58.27 2.81 53.36 2.75 45.78 2.79 46.73 2.76 54.41 15.42 54.50 14.98 Germany 53.81 1.79 47.48 1.45 47.48 6.21 47.48 6.19 47.48 5.85 47.48 5.66 Greece 45.00 3.61 40.00 1.29 40.00 3.75 45.00 4.93 49.00 5.39 46.00 5.57 Hungary 40.00 0.92 38.00 0.89 36.00 0.73 32.00 1.57 16.00 0.85 16.00 0.00 Iceland 45.37 1.21 42.58 1.16 35.72 0.22 46.12 1.55 46.24 1.44 46.24 1.43 Ireland 44.00 0.98 42.00 1.00 41.00 1.09 47.00 5.42 48.00 1.01 48.00 0.95 Israel 50.00 2.33 49.00 3.97 47.00 3.65 45.00 3.88 48.00 3.91 50.00 6.21 Italy 46.40 3.57 46.10 3.27 44.90 3.10 45.20 2.95 48.55 10.19 49.13 9.85 Japan 50.00 4.54 50.00 4.54 50.00 4.51 50.00 4.73 50.00 4.63 50.84 4.57 Korea 44.00 5.41 39.60 3.83 38.50 3.31 38.50 3.01 41.80 8.86 41.80 4.44 Luxembourg 47.15 2.09 38.95 1.01 38.95 0.92 38.95 0.94 41.34 3.15 43.60 3.00 Mexico 40.00 49.75 33.00 1.70 28.00 4.86 30.00 4.53 30.00 4.17 35.00 29.47 Netherlands 60.00 1.76 52.00 1.38 52.00 1.25 52.00 1.19 52.00 1.16 52.00 1.20 New Zealand 39.00 1.72 39.00 1.55 39.00 1.57 35.50 1.46 33.00 1.37 33.00 1.28 Norway 47.50 2.56 47.50 2.48 40.00 1.54 40.00 1.57 40.00 1.58 39.00 1.58 Poland 40.00 3.55 40.00 3.28 40.00 2.93 32.00 2.74 32.00 2.50 32.00 2.38 Portugal 40.00 3.38 40.00 4.37 42.00 4.51 45.88 10.19 49.00 10.11 56.50 16.11 Slovak Republic 42.00 7.95 19.00 0.49 19.00 0.43 19.00 0.50 19.00 0.43 25.00 3.91 Slovenia 50.00 4.28 50.00 4.27 41.00 1.41 41.00 1.38 41.00 1.38 50.00 5.34 Spain 48.00 4.31 45.00 2.64 43.00 2.51 43.00 2.36 52.00 11.78 52.00 11.67 Sweden 55.38 1.51 56.51 1.50 56.44 1.44 56.56 1.48 56.60 1.51 56.86 1.51 Switzerland 43.75 3.62 42.06 3.33 41.67 3.32 41.67 3.24 41.67 3.36 41.67 3.32 Turkey 40.60 11.46 40.60 10.39 35.60 2.73 35.66 4.37 35.66 4.22 35.76 3.87 United Kingdom 40.00 1.32 40.00 1.23 40.00 1.22 50.00 4.37 50.00 4.30 45.00 4.21 United States 46.65 8.81 41.50 8.78 41.85 8.44 41.85 8.39 41.78 8.34 46.25 8.23 OECD Average 46.52 4.86 43.57 3.06 41.39 2.89 41.76 3.29 42.62 4.41 43.57 5.22 t.t.r. – total statutory tax (PIT) rate
thr. – threshold at which the top rate is applied – expressed as a multiple of the average wage Source: OECD (2014d).
After 2011 the trend has been reversed – the rates have risen, but have not
reached their level from the year 2000. The change can be plausibly attributed to
the effect of the economic and financial crisis (European Commission 2013: 33).
Out of different kinds of tax expenditures the key role in narrowing income
disparities is played by the provisions which exempt an initial level of income
from PIT – in the form of exceptions, reductions or credits (Paturot, Mellbye,
Brys 2013: 4). The instrument has increased the progressivity of Personal
Income Taxes, particularly in the countries with flat PIT systems. Its justification
is that a minimum of marked income should be free of tax because it is spent on
necessities (Hybka 2005: 53). What’s more, it is useful in reducing poverty.
Table 3. Central level Zero-Rate Brackets, Basic Allowances and Basic Tax Credits (as a Percentage of the Average Wage) in OECD countries in 2000 and 2010 year
Country 2000 2010 measure % of average wage measure % of average wage 1 2 3 4 5
Australia zero-rate bracket 15 zero-rate bracket 15 wastable tax credit (i) 2 wastable tax credit (i) 13 Austria zero-rate bracket 12 zero-rate bracket 29 Belgium basic allowance 16 basic allowance 15 Canada wastable tax credit 19 wastable tax credit 23 Chile basic allowance 120 basic allowance 111 Czech Republic basic allowance 22 wastable credit 43 Denmark wastable tax credit 12 wastable tax credit 11 Estonia basic allowance 16 basic allowance 18 Finland zero-rate bracket 30 zero-rate bracket 38 France zero-rate bracket 15 zero-rate bracket 17 Germany zero-rate bracket 20 zero-rate bracket 19 Greece zero-rate bracket 71 zero-rate bracket 59
Hungary – – – –
Iceland wastable tax credit 41 wastable tax credit 42 Ireland wastable tax credit 21 wastable tax credit 23 basic allowance (t) 13 Israel wastable tax credit wastable tax credit
Italy – – wastable tax credit 28
Japan basic allowance 8 basic allowance 8 Korea basic allowance 3 basic allowance 4 Luxembourg zero-rate bracket 19 zero-rate bracket 23
Mexico – – – –
Netherlands basic allowance 13 wastable tax credit 13
New Zealand – – –
Norway basic allowance (i) 20 basic allowance (i) 16 Poland wastable tax credit 10 wastable tax credit 9 Portugal wastable tax credit 12 wastable tax credit 14 basic allowance 24 Slovak Republic basic allowance 25 basic allowance (t) 43
Table 3 (cont.)
1 2 3 4 5
Slovenia basic allowance 12 basic allowance (t) 36 Spain basic allowance 19 basic allowance 21 Sweden
zero-rate bracket 88 zero-rate bracket 101 basic allowance (i) (t) 3
basic allowance (i) (t) 5 non-wastable tax credit (t) 3
Switzerland zero-rate bracket 25 zero-rate bracket 18
Turkey basic allowance 4 – –
United Kingdom basic allowance 18 basic allowance (t) 19 United States basic allowance 22 basic allowance 13
(t) amount is tapered with income
(i) amount increases with income (up to a limit) Source: Torres, Mellbye, Brys (2012): 21.
The instrument takes on three possible forms. At the moment a comparable
number of countries use the zero-rate tax bracket (9), the basic personal
allowance (14) and the wastable tax credit (11). The vast majority of OECD
countries use the instrument. In Australia, Ireland, Sweden, Norway, the United
Kingdom, Slovak Republic and Slovenia its redistributive effect is strengthened
by the fact that the amount of exempted minimum changes according to the level
of income. The only OECD country which withdrew the instrument is Hungary.
In the period 2000–2010 a significant (at least 2 p.p.) increase in the value of
basic exemptions as a share of the average wage took place in 12 OECD
countries. At the same time the value did not considerably changed in 13
counties and it decreased in 6 countries.
From a redistributional perspective it is important to link the level of the
exempted income with the minimum subsistence figure in a given country.
Meanwhile in Korea, Japan and Poland it is lower that 10% of the average wage.
The relation between the level of exempted income and the average wage vary
substantially in OECD countries.
In 2014 all but one OECD countries differentiated the tax burden from the
level of income (Table 4). The difference between average income tax rate at
167% average earnings and the same rate at 67% average earnings (on the
assumption that the person is single and doesn’t have any children) is the highest
(23 p.p.) in the Netherlands. Its value exceeds 15 p.p. in Ireland, Luxembourg,
Greece, Sweden, Portugal and Italy. In contrast, in Hungary the tax burden does
not change with the level of income. In Chile and Poland the reduction is
marginal – the difference in the two average income rates described above is
lower than 2 p.p.
T ab le 4 . T h e d if fe re n ce b etwe en a v era g e in co m e tax ra te at 1 6 7 % a v era g e ea rn in g s sin g le p erso n n o c h il d a n d a v era g e in co m e ta x ra te at 6 7 % av era g e ea rn in g s sin g le p erso n n o c h il d (p erc en tag e p o in ts) Co u n try / Ye ar 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 20 08 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 A u stra li a 13 .8 12 .0 12 .3 12 .5 12 .7 11 .6 10 .5 9 .6 11 .4 12 .5 12 .2 12 .2 12 .2 11 .9 11 .6 A u stria 12 .8 13 .0 12 .9 12 .8 13 .0 13 .4 13 .1 12 .9 12 .7 13 .3 13 .2 13 .0 12 .9 12 .6 12 .5 Be lg iu m 13 .2 13 .0 12 .8 12 .9 13 .0 12 .9 13 .0 13 .0 13 .1 13 .2 13 .0 12 .9 13 .0 13 .2 13 .2 Ca n ad a 10 .5 9 .1 9 .0 9 .1 8 .9 9 .4 9 .4 9 .9 9 .9 9 .7 10 .2 10 .2 10 .2 10 .2 10 .3 Ch il e 0 .5 0 .5 0 .0 0 .0 0 .0 0 .0 0 .0 0 .0 0 .0 0 .0 0 .7 0 .7 0 .9 0 .8 0 .9 Cz ec h Re p u b li c 4 .7 4 .8 5 .0 5 .2 5 .4 5 .6 8 .1 8 .3 8 .2 7 .9 7 .7 7 .2 7 .3 7 .3 7 .1 De n m ark 13 .1 13 .3 13 .1 13 .1 13 .0 12 .9 13 .0 13 .1 13 .4 12 .9 9 .8 9 .9 10 .0 9 .7 9 .2 Esto n ia 3 .6 4 .0 3 .6 3 .3 4 .4 4 .4 4 .2 3 .4 3 .2 3 .4 3 .3 3 .1 3 .0 2 .8 2 .6 F in lan d 13 .1 13 .3 13 .3 13 .3 13 .4 13 .3 13 .4 13 .6 13 .3 13 .5 13 .8 13 .9 14 .2 13 .8 13 .8 F ra n ce 8 .7 8 .7 8 .1 7 .9 7 .8 7 .7 7 .9 8 .0 8 .0 8 .0 8 .0 8 .1 8 .2 8 .2 8 .2 G er m an y 15 .3 15 .6 15 .8 15 .9 15 .6 13 .9 13 .9 13 .8 13 .8 13 .9 13 .4 13 .6 13 .5 13 .5 13 .5 G re ec e 11 .5 11 .7 12 .5 14 .5 15 .2 16 .1 16 .1 13 .9 13 .0 12 .0 12 .6 11 .1 10 .9 15 .6 15 .5 Hu n g ary 12 .7 12 .7 15 .0 18 .9 18 .5 19 .3 18 .6 17 .4 17 .0 15 .8 11 .9 8 .2 2 .1 0 .0 0 .0 Ic elan d 16 .6 16 .1 15 .9 13 .6 12 .2 9 .3 6 .8 6 .8 6 .7 8 .9 10 .6 10 .1 10 .1 9 .9 9 .9 Ire lan d 15 .6 15 .2 15 .1 15 .9 17 .0 17 .4 17 .2 17 .4 17 .4 16 .9 17 .0 19 .3 19 .3 19 .3 19 .4 Isra el 14 .2 14 .3 14 .3 13 .7 15 .6 15 .3 14 .2 14 .0 13 .5 12 .0 12 .0 11 .6 11 .0 11 .5 11 .6 Italy 10 .1 9 .8 9 .9 11 .6 11 .6 10 .8 10 .7 11 .2 11 .2 11 .2 11 .1 11 .1 1 1 .1 11 .0 15 .0 Ja p an 5 .7 5 .7 5 .5 5 .5 5 .5 5 .6 6 .0 6 .5 6 .5 6 .2 5 .9 6 .0 6 .1 6 .0 6 .1 Ko re a 5 .9 6 .4 6 .2 6 .9 7 .1 7 .1 7 .5 7 .8 7 .6 7 .4 7 .1 7 .1 7 .3 7 .3 6 .8 L u x e m b o u rg 16 .0 16 .0 15 .2 15 .2 15 .1 15 .1 15 .0 14 .9 15 .0 15 .4 15 .4 15 .9 15 .7 15 .9 15 .8 M ex ico 13 .8 13 .7 13 .1 13 .3 13 .5 15 .0 14 .8 14 .7 13 .7 12 .9 13 .0 12 .3 12 .2 12 .2 11 .6
T ab le 4 (c o n t. ) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Ne th erlan d s 20 .1 20 .6 20 .7 21 .1 21 .3 20 .9 21 .2 22 .4 22 .7 23 .4 23 .1 23 .3 24 .0 22 .6 23 .2 Ne w Zea lan d 5 .6 5 .6 5 .8 6 .2 6 .7 6 .9 7 .3 7 .8 8 .2 9 .1 9 .1 9 .0 9 .3 9 .5 9 .7 No rw a y 11 .4 11 .6 11 .3 11 .2 11 .2 10 .8 9 .7 10 .1 10 .1 10 .1 10 .1 10 .1 10 .1 10 .1 9 .8 P o lan d 2 .4 2 .5 2 .6 2 .6 2 .5 2 .5 2 .7 2 .3 2 .8 2 .0 2 .0 1 .8 1 .8 1 .7 1 .7 P o rtu g al 11 .3 11 .4 12 .4 12 .3 12 .3 12 .7 12 .9 13 .0 12 .9 12 .8 13 .4 15 .3 13 .6 15 .5 15 .5 S lo v ak Re p u b li c 6 .4 6 .4 6 .6 7 .2 7 .3 7 .3 7 .0 6 .8 6 .4 7 .6 7 .4 6 .4 6 .4 6 .3 6 .2 S lo v en ia 8 .9 8 .8 8 .8 8 .9 8 .9 10 .7 10 .7 8 .5 8 .7 8 .6 10 .4 10 .6 10 .4 8 .9 9 .0 S p ain 9 .9 9 .5 9 .1 9 .8 9 .4 9 .2 9 .1 9 .1 10 .7 10 .8 9 .4 9 .5 10 .5 10 .4 10 .3 S w ed en 11 .7 12 .1 12 .0 12 .1 12 .4 13 .1 13 .7 15 .3 15 .9 15 .2 15 .8 15 .7 15 .4 15 .2 15 .6 S w it ze rlan d 7 .9 7 .9 7 .9 7 .8 7 .9 7 .9 7 .8 7 .9 7 .9 7 .9 7 .9 7 .8 7 .9 7 .9 8 .0 T u rk e y 4 .8 4 .1 3 .8 3 .8 3 .2 3 .3 3 .1 3 .3 6 .0 6 .0 6 .3 6 .4 6 .4 6 .6 6 .7 Un it ed Ki n g d o m 7 .9 8 .1 8 .3 8 .5 8 .6 8 .7 8 .7 8 .9 8 .6 7 .7 8 .1 9 .0 9 .6 10 .7 11 .0 Un it ed S tate s 9 .3 9 .1 8 .8 8 .2 8 .1 8 .1 8 .2 8 .2 9 .0 9 .8 9 .8 9 .0 8 .9 8 .9 8 .9 OECD – A v era g e 10 .3 10 .2 10 .2 10 .4 10 .5 10 .5 10 .4 10 .4 10 .5 10 .5 10 .4 10 .3 10 .2 10 .2 10 .3 S o u rc e: o w n c alcu latio n s b ase d o n OECD (2 0 1 4 d ).
The only OECD country that currently does not differentiate the tax burden
– Hungary – has a single-rate PIT and does not use the provisions that exempt an
initial level of income from tax. In other countries with flat tax regimes (Estonia,
Czech Republic) the scale of the reduction does not exceed the OECD-wide
average. Despite the described fact, in Chile – a country with a 7-brackets PIT
system – the difference between average income tax rates at 167% and 67% of
average wage is marginal. Poland also has a multiple rates PIT schedule and the
scale of differentiation of tax burden is also marginal.
In the early 2000s the majority of OECD countries (16) tended to make their
Personal Income Tax schedules more neutral. As a result, the redistributional
effect of PIT was diminished. After the Great Recession of 2008–2009 the trend
was reversed. In 19 OECD countries the difference between average tax rates on
high and low incomes widened. The main reason for that was the urgent need for
fiscal consolidation. Under the circumstances the governments of these countries
decided to shift the tax burden to the better-off.
4. SUMMARY / CONCLUSION
The Progressive Personal Income Tax is the most widespread tax instrument
used in narrowing income disparities. Nowadays all but one OECD countries
reduce tax burden with the level of income, although the scale of the reduction
varies substantially. The redistributional properties of PIT are determined by the
level of statutory rates (especially the top and the bottom rate and their
relations), the number of tax brackets and provisions that reduce tax liability
with the special importance of amount of income that does not cause the tax
liability. The character of the PIT scale does not prejudge the redistribution
properties of the construction. The level of the top PIT rate also plays an
important role. The correlation between the scale of the tax burden and the top
PIT rate measured by Pearson index seems to be significant. Another key factor
is the presence and the level of the amount of income that is exempted from PIT
(in the form of zero-rate tax bracket, personal allowance or tax credit). The
instrument exists in tax systems of all OECD countries with the exception of
Hungary, Mexico and Turkey. There is no clear trend in the level of PIT
progressivity in OECD. The difference between the average income tax rate at
167% average earnings and the average income tax rate at 67% during 2000–
2014 has fluctuated about 10 p.p. At the same time the level of income
disparities has widened. OECD countries face an urgent problem to counteract
the phenomenon. They should consider widening the use of PIT to mitigate
income inequalities.
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Małgorzata Mazurek-Chwiejczak
PROGRESJA PODATKU OD DOCHODÓW OSOBISTYCH W PAŃSTWACH OECD W KONTEKŚCIE REDYSTRYBUCJI DOCHODU – KIERUNKI EWOLUCJI Streszczenie. Zjawisko nierówności społecznych ma charakter powszechny i trwały. Obecnie
w wielu krajach OECD różnice między biegunami bogactwa i biedy osiągnęły najwyższy poziom od 30 lat, zaś odsetek osób zagrożonych ubóstwem sięga nawet 40%. W takich warunkach konieczne jest prowadzenie szeroko zakrojonej polityki redystrybucyjnej realizowanej za pośred-nictwem systemu transferów społecznych, jak i systemu podatkowego. Zasadniczym instrumentem podatkowym wykorzystywanym do wyrównywania poziomu dochodów ludności jest progresywny podatek dochodowy, silniej obciążający osoby lepiej sytuowane. Rolę tę może pełnić również podatek liniowy z kwotą wolną od podatku ustanowioną na odpowiednio wysokim poziomie. W artykule przeprowadzono analizę skali progresji podatków od dochodów osobistych w państwach OECD. W dalszej części dokonano analizy porównawczej podstawowych elementów konstrukcyjnych warunkujących stromość progresji PIT, jakimi są liczba przedziałów skali podatkowej, wysokość stawek obowiązujących w najwyższym przedziale, jak również wysokość dochodu niepodlegająca opodatkowaniu tą daniną.
Słowa kluczowe: podatek dochodowy od osób fizycznych, podatek od dochodów osobistych,
